‘How Much Money Will I Need to Live on in Retirement?’

Many of us could learn something from our friends in the animal kingdom. Squirrels and chipmunks instinctively stockpile food before winter sets in. Many an author has referred to retirement years using winter metaphors. It’s appropriate, then, to prepare our own bounty to get us through the winter of our lives, our senior years.

Most people are so concerned about making it to the next payday that they don’t even want to think about how they’re going to live once they retire from jobs. They need to.

How much money will a person need to live on in retirement? It really depends on the particular person and their situation.

With the average life expectancy in America continuing to steadily rise, the average person who is 65 today can expect to live another 20 years. That’s a looonnnngggg time to stretch out that retirement nest egg, which begs the question of how to pay for Assisted Living residency and long-term senior care.

ElderLife: Home Equity Solutions for Retirement Funding

Got a house that’s way too big with the kids grown up and moved into homes of their own? Wanting to move into a community of peers right away? Not wanting to hassle with putting that house up for sale, making repairs, and having to put life on hold whenever a realtor wants to bring someone by for a showing? If this sounds like you or an aging parent, ElderLife could be the perfect solution. Basically, it extends a line of credit to pay rent while Riverwood preps the house for selling. This differs from a reverse mortgage home loan.

Companion Living

If solitude isn’t for you, sharing an apartment with another resident who feels the same can enhance the Riverwood experience while saving money that would otherwise go toward a private room.

VA Benefits

Wartime veterans 65 and older can qualify for Aid & Attendance Benefits, as can their spouses and other dependents. Eligibility is determined by the U.S. Department of Veterans Affairs (VA). As with many programs, benefits may not start until the senior’s own personal funds are exhausted. Visit https://www.va.gov/pension/how-to-apply/ to begin the process.

Government Programs

Does Medicare pay for assisted living? Does social security pay for assisted living? Benefits vary from state to state, so it is important to research what Medicare will pay for and the eligibility retirements of these programs. Your financial situation can determine whether you can get any help from Uncle Sam. Learn more about government programs to help pay for long-term care at https://www.nia.nih.gov/health/paying-care

Convert a Life Insurance Policy to Pay for Long-Term Care

Some life insurance policies allow cash advances while you are still alive, subtracting this from the amount beneficiaries get when the policyholder dies. Another option is Life Care Funding, which involves converting a life insurance policy into funds for long-term care. Applying to see if you’d qualify is free and easy: http://www.lifecarefunding.com/

Gift Tax Exemption

Family members contributing to pay for a resident’s rent will want to talk to their accountant about an IRS gift tax exemption of up to $15,000 per individual per year.

Long-Term Care Insurance

Policies differ based on what services are covered, so we recommend shopping around and comparing products if this is the route you go. Cost varies according to your age at the time of getting the policy and the specific benefits.

Invest Savings in Something that Will Generate Income

Money can be made to grow by investing in something that should be conservative enough to offer protection from market volatility but promising enough to at least show modest growth. One example would be creating a rental property to get monthly rent from tenants.

Consult the Experts Before Acting

We recommend speaking with an elder law attorney, and a consultation with a tax professional is strongly advised before making financial decisions. Choose someone who will act with your long-term best interests in mind. We can recommend Martin Pierce of the firm of Pierce & Huisman, PLLC, in Chattanooga.

Riverwood offers incentives for residents referring their friends to join in our community. Ask our community consultants for more information.